Opinion | Time to stop bosses dipping their fingers into the MPF

The government has finally given a timetable for allowing employees to have complete control of their Mandatory Provident Fund investment. But the reform has still not gone far enough.

Bosses can still dip into the employer contribution section of a worker's account to make long-service or severance payments, an exploitation of the 2.4 million workers under the scheme.

Many people do not care about the MPF, for the simple reason that the scheme from the beginning was designed in a way that gave the bosses more say than the workers.

The MPF requires the employer and the employee to each contribute a sum equal to 5 per cent of the worker's salary, up to a combined HK$2,500 a month, to funds run by banks, insurers or fund houses.

Under the scheme, the bosses picked the provider they liked and employees could not leave the providers even if they were unhappy with the service or fees. It was only from November 1 that workers were allowed to shift their portion of the contributions to any provider they liked, once a year. About 30,000 employees have shifted so far, putting providers on notice to treat workers in MPF schemes better or they will leave for the competition.

But even if workers choose other providers, the employers' contributions are still with the providers the companies choose. Last week, the Secretary for Financial Services and the Treasury, Chan Ka-keung, said that the Mandatory Provident Fund Schemes Authority would study over the next three years how to let workers shift all contributions, including those by their employer, to whichever provider they wanted.

However, the government is remaining silent on the arrangement that allows employers to use companies' MPF contributions to make long-service or severance payments to staff. From 2000 to 2010, employers took out more than HK$12 billion from employees' MPF accounts to make such payments. Low-income workers made redundant several times may find their MPF drained.